10 Ways to Pay off debt fast by saving more money
Today, I want to share with you the best ways to pay off debt fast and save money. Debt can be such a draining and frustrating experience.
There are many ways we can get into debt, but mostly it is related to those habits we have formed about spending and saving (and not good ones either). I have been there, done that.
There are so many ways I could have saved money in my early twenties that would have seen me ahead financially now. But I can honestly say, I never thought about finances back then.
And that’s how easy it is for most people to get into debt – just by the fact that they are not intentional about where their money is going. Well, I believe these are the quickest ways to help you pay off debt fast.
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10 Ways to Pay Off Debt By Saving More Money
Track your spending
I’m not talking about a quick look at your account history, but a thorough review of all your spending.
I like to categorize all my spending into groups such as grocery, commuting, entertainment, and clothing. This is so that I can easily refer to it when I am planning a budget.
It truly simplifies budgeting because you can see what you can cut down on straight up. In order to pay off debt fast, you want to find the money to help you pay it off (stating the obvious here).
But the best way to “find” that extra money to pay off debt is by knowing exactly where your money is going. Then, you can easily evaluate each cost to see what you can remove from there to pay off debt.
This is also where you can ask yourself what you can possibly do without for now. Do you still need that gym membership or cable subscription?
Remember, you don’t have to cut it out for good but it helps to cut these costs down for an allocated time (that is until you at least payoff debt).
Sell what you don’t need or use
Now, it’s time to review what is already in your household, whether it be the kitchen or your closets. There is nearly always some things you will find that you no longer use (or never really used in the first place).
Earn extra cash by sourcing clothes, shoes, household items and putting them up for sale. Selling what you don’t need is a great way to not only make more money but also declutter your house in the process.
Cut down on grocery costs
Groceries are probably the most expensive spend in most households. If you’re not careful, you could end up spending hundreds of dollars extra just for lack of planning and budgeting.
Luckily, there are plenty of ways to cut down those costs. You can find some simple ideas for cutting grocery costs in my other post HERE.
Cut down on takeouts
Takeouts easily deduct a huge chunk of your budget if you’re not careful, and most of the time, we don’t take these expenses into account when budgeting.
It’s important to monitor money spent on takeouts including those regular coffees, and anything else purchased on the go.
I suggest tracking those spendings over a month and putting that amount of money saved toward paying off debt every month. It has to be highlighted that discipline and preparation is key here.
Without preparation and disciplined, it’s so easy to fall back into buying takeouts again. The one thing that helps me cut back on takeouts is being prepared.
If I know I have four days at work this week, I know I’m going to need to prepare meals and have an idea of what I’m going to take to work ahead of time.
This is where meal prep really helps. If you haven’t tried meal prepping yet, you are missing out on the benefits of saving not only money but time as well.
Learn to meal prep
Meal prepping is about planning and preparing what you need ahead of time. This can be done weekly, fortnightly or monthly, but either way, it helps you have your meals organized in a systematic way.
Another benefit of meal prepping is that it helps you stay consistent in your food budgeting efforts. When meal prepping, what you are essentially doing is choosing the meals you are going to cook, listing all the ingredients you’ll need based on the meals you plan to cook, and then grocery shopping strictly based on those needs.
It can involve chopping all vegetables and other ingredients you need ahead of time. For example, if you’re planning to have grilled salmon and veggies at some point in the week, you would have your veggies chopped and ready to go in serving size portions.
You can set aside as many as you wish because you can have these veggies with grilled chicken or anything else you want. It is important to be systematic by planning to make meals that contain similar ingredients.
This is another way to save money and time, you’re saving money as you’re not constantly having to buy all sorts of ingredients to cook meals.
And obviously you will save time as you’re not necessarily cooking multiple very different meals but instead, you’re using similar ingredients and having slight variations such as a different protein.
Another part of meal prep is cooking some of your meals in batches and freezing in lunch boxes.
If that’s not enough motivation to meal prep, one other awesome benefit of meal prepping is that it makes it so much easier to eat healthier since you constantly have prepared meals ready.
And there is less temptation to buy greasy food on the go. Ever since I started cutting back on takeouts, I know I feel so much healthier and energized.
If you are not sure where to start, you can take a look at these food prep basics and ideas from Family Fresh Meals.
Review your payment plans
Review all the essential bills you pay for regularly such as insurance and internet. Then, compare prices to make sure you are getting the best deal.
Don’t get into the habit of just keeping the same plan or staying with the same provider just because it’s convenient. Be well informed about what you’re paying for and why when it comes to any bill.
Use personal finance apps
There are so many personal finance apps and websites, but you obviously won’t need all of them. A good place to start is Goodbudget.
This app helps you plan and categorize your spending. So you allocate how much you want to spend on things like groceries, gas, utilities and rent.
This is a truly simple budgeting app without complicated financial jargon. If you need an app with a bit more to offer, Level Money is a good option.
Level Money calculates your budget based on all your accounts and presents you with the amount you can spend either daily, weekly or monthly.
Earn a side income
Well, of course, the best way to pay off debt faster is to make extra money where possible. I know it’s not always easy to work extra hours in addition to what you already do and every other demand you have to meet daily.
But there are some easy ways to make money especially online. It doesn’t have to involve making thousands either.
Any cash you make can be used to pay off debt. Just remember to allocate this extra income specifically for paying off debt.
Consolidating debt can involve rolling all your loans into one and possibly reducing fees from all the different debts. Debt consolidation can be good or bad, depending on your situation. You have to make sure it’s right for you first.
There’s no point refinancing if you cannot meet the repayments required for the new loan, as it won’t truly help you pay off your debt.
It helps to try other methods first such as talking to and negotiating with your credit provider.
Seek debt counselling
If it comes to the point where you need serious insider financial advice, then let the professionals help you. Whatever you do, please don’t ignore the problem.
Debt can be tempting to ignore as it is easier to just not think about it rather than facing the problem and taking actions.
Take steps to fix it now. The sooner you seek help, the better the outcome will be for you.
Well, that’s it for me for now. Would love to hear your ideas for paying off debt fast.